Strategy Consulting 101

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October 28th, 2005

Grant Ford (MBA04) – Bain & Co.

Vishy Padmanabhan (MBA04) – A.T. Kearney Inc.

Strategy Consulting 101

Goizueta Business School: MBA Class of 2007



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Agenda & Objectives

What is strategy consulting? 2:00pm – 2:20pm

Bain case study 2:20pm – 2:35pm

A.T. Kearney case study 2:35pm – 2:50pm

Q&A 2:50pm – 3:10pm

“How recruiting works” within consulting firms – Do’s and Don’ts 3:10pm – 3:30pm



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What is strategy consulting ?

Strategy consulting is about addressing issues that CXOs facecurrently / expect to face in the future with far-reaching organizationwide implications on how they run their business and make decisions

Global consulting market ~ $130B; NA ~ $75B (2005 estimates)

Strategy consulting share ~ 11% of total market; ~ 2% growth

Leading firms include Mckinsey, Bain, BCG, Booz Allen, A.T. Kearney, Monitor, Roland Berger,Deloitte S&O practice, and others

Trusted Advisor: Strategy consulting should not be sold; It is bought

Strong brands with deep relationships with CXO/Board

Traditional focus has been on the “What to do ” but increasing emphasis on “How to do ”

Discretionary spend for most customers; First to be impacted during a downturn

Source: Kennedy Information



Strategy Consulting is not for everyone; It is not only about your

capability, it is also about the your personality

MECE thinking (Mutually Exclusive, Collectively Exhaustive)

Hypothesis driven problem solving

Deal with ambiguity

Bring structure into an unstructured situation

Work smart and act smart through periods of naiveté

Adopt CEO perspective every step of the process

Think end-game

Use 80:20 approach

Question status quo

Deal with trial & error

Work with minimal data

Knowledge across all functions within a business

Innovative “out of the box” thinker

Effective synthesis of large amounts of research

Work under high pressure (Short, intense efforts)

Constantly work with incredibly smart people who have huge egos,are opinionated, have limited attention spans but photographicmemory, constantly practice nit-picking and are notoriously impatient

Skills & Traits

Ask yourself

Do I have thepersonality to succeedin this environment?

Have I demonstratedthese traits in therecent past?

How do I feel about

the experience?



Typical strategic issues we are hired to address

Clients hire us to address a specific issue. They pay us $$

for our objectivity, rigor, expertise and speed

How do we enterthis market?

Help me withdue diligence

What will my

supply chain looklike in 2010?

Help us come up with newways to increase revenue?

Should we goahead with this

merger? What should be ourOffshoring /

OutsourcingStrategy?

How do I ensure nextgeneration cost

competitiveness?

How should we serve

our customers?

Illustrative

How do weglobalize?

How do we bettermonetize our

products? How should

our brandstrategy be?



Case study # 1: Media Co. project overview

Client: Large media company with holdings in television, radio,newspapers and magazines

Situation: Circulation at the company’s flagship regional publication isdeclining, in spite of the fact that the population in its targetregion is growing rapidly

Challenge: Find a killer idea to substantially boost revenue by appealing tothe unmet needs of consumers and advertisers

Duration: Six months – October 1 to April 1



Case study # 1: Media Co. project overview

Oversight & industryexpertise(3 partners)

Project management(Manager)

Advertiser andconsumer needs(Case team leader)

AnalogsMarket Dynamics

Consultant

Associate consultant

ConsultantAdvertiser Consumer

CTL

AC

Consultant

AC



Case study # 1: Analog workstream



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Case study # 2: Leading electronics retailers in NA

Client: Large electronics retailer in NA

Situation: Growth is declining in mature markets (e.g. USA, Canada) andwanted to expand into several developing markets

Challenge: Develop an analytical model for evaluating various countries anddevelop a market entry strategy

Duration: 6 weeks

Approach: Use A.T. Kearney Intellectual capital GRDITM (Global RetailDevelopment Index) and develop a client specific index to arriveat target countries based on which retail market entry strategy will

be developed



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GRDI Variables

4- Time Pressure (20 percent)

Share of modern retailing (10 percent), Modern retail sales area perinhabitant (5 percent), Number of international retailers (10 percent),Market share of leading retailers (5 percent)

Retail sales per capita (10 percent), Law and regulation (5 percent),

Population (5 percent), Urban population (5 percent)

3- Market Saturation (30 percent)

The time factor is measured by the sum of the CAGR (1999 to 2003) ofthe retail sales and the retail sales area weighted by the development

of the economy in general (CAGR of the GDP from 1999 to 2003

2- Market Attractiveness (25 percent)

Political risk (25 percent), economic performance (25 percent), debtindicators (10 percent), debt in default or rescheduled (10 percent),

credit ratings (10 percent), access to bank financing (5 percent),access to short-term financing (5 percent), access to capital markets (5percent) and discount in forfeiting (5 percent)

1- Country Economic & Political Risk (25 percent)

The 2005 AT Kearney GRDI

Case study #2: AT Kearney has been conducting the GlobalRetail Development Index study on a yearly basis…

Lowerpriority

Source: AT Kearney analysis, GRDI 2005



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… and has built a strong understanding of “window ofopportunity” for retailers who seek global expansion

GRDI results 1995 to 2005 for selected markets - “Window of opportunity” analysis

Source: AT Kearney analysis



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Client XYZ hired us to identify countries for expansion andsubsequently develop the retail market entry strategy

Interviews with key stakeholders to map current Client XYZ requirement and prioritization criteria

Sequential filtering criteria was used and the full list of emerging markets was shortened to the most

relevant markets for Client XYZ

Variables were identified and clustered based on relevant Client XYZ specific indicators

• Country Attractiveness and Risk (15 variables)

• Market Attractiveness (8 variables)

• Client XYZ Operations (5 variables)

• Time Pressure (4 variables)

Correlation analysis was used to determine weights and variables when direct data are not available

The GRDI model was then customized and tested with Client XYZ key stakeholders. The GRDI tool allowscustomized analysis and includes regional trends and country benchmarking

A workshop was held to validate the results of the new market entry index and extract learning / prioritiesfor Client XYZ


We used the GRDI index but customized it to meet theclient’s requirements by following a series of critical steps



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We developed an analytical tool that can be used by the clientfor country prioritization


GRDI Country Prioritization For Retail Expansion – Client XYZ

R i s k

( C a l c u l a t e d a s a W e i g h

t e d A v e r a g e o f C o u n t r y

C

o n s t r a i n t s a n d M a r k e t S a t u r a t i o n 2 0 0 5 I n d e x e d S c o r e s

)

Attractiveness(Calculated as a Weighted Average of Country Attractiveness and Market Growth 2005 Indexed Scores)

800 20 40 60 100

20

40

60

80

100

Asia Eastern Europe Latin America Middle East & Africa North America Western EuropeMost attractivemarkets

Bubble sizerepresents

Market Size2004 in US$Least

Attractive

MostAttractive

Country specific retail strategy was developed based on thisanalysis for 10 developing countries in Eastern Europe and Asia



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A day in the life (1 of 2)

8:30 Quick manager update to confirm action items

8:45 Search Factiva for articles on client’s youth-targeted strategy; document keyfindings

10:30 Phone call to “client map” (VP, Circulation) to determine potential contacts atclient organization

10:45 Browse Thomson for media industry analyst reports; send email to Bain

Research for assistance

11:30 Quickly blank out slide deck for client update

12:30 Lunch w. start class to plan upcoming integration dinner

1:45 Impromptu case team meeting (consultants only) to bounce around a few ideas

2:30 Impromptu foosball tournament



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A day in the life (2 of 2)

2:50 Call with ’s SVP, Circulation to pick her brain on key topics

3:30 Begin populating blank slides with relevant data (using the Bain Wizard, ofcourse)

4:15 Beg for Excel tutorial from brilliant undergrads

4:40 IM colleague in LA office who worked in the media industry for advice

5:00 Send particularly challenging slide to graphics for help

5:05 Stroll over to Lenox for coffee w/ ACs

5:20 Determine key fit points between client’s strategy and capabilities

6:30 Review deck with CTL and make a few tweaks

7:15 Send slides to manager and hit the road



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Q&A on Strategy Consulting



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“How recruiting works” within consulting firms – Do’s and Don’ts

Bookmark candidates

Lead week

Recruiting presentations

General sessions (Like this one right now)

Every time you initiate a discussion

Informational interviews

Internal referrals

Casual conversations

Resume review

Exchange notes, forward emails written to colleagues

Discuss resumes, candidate capability and readiness with Professors in the school

Gather input from interns, past employees who are currently in school

Formal resume review session prior to interview

Typical Process, Steps we follow

Treat every interaction as an interview data point



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“How recruiting works” within consulting firms – Do’s and Don’ts

Be prepared

Depth of knowledge about firm

People and culture

Type of work

Style of work

Local office details

• How to - CMC, Interns, Professors, Consulting guides,Market research

Be professional

Communication (Written, verbal and non-verbal)

Comments

Appearance

Follow up, Thank you notes etc

• How to - G+, CMC, 2 nd years, recent alums

Display capability and fit

• How to - 2nd years, recent alums, company website

Use your internal resources first, beforereaching out to alums, recruiters.

“Best Practices”

Not knowing enough about us

• Student - “I am very interested in healthcare consulting”

• Alum – “But we don’t do that work here”

• Student – “But I am also interested in Retail work”

• Alum – “We don’t do much of that either”

• Student – Oops !!!!

Not showing up

Trying to be too nice and smooth

Showing off / Throwing names

Mail bombing every alum in the firm

Ctrl C, Ctrl V; Same email to every alum

Too much communication (follow-up / talking etc)

Poor communication

Misrepresenting what you do / did

Wasting our time

“Worst Practices”

Strategy Consulting 101

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